Skip to main content

tv   Government Access Programming  SFGTV  February 5, 2018 2:00pm-3:01pm PST

2:00 pm
ordinances is they exclude buildings and commercial storefronts that are currently under permit for repairs or are being actively marketed so they would not be required to register, but those that are empty and don't fit under those conditions are required to register and pay the annual fee. in addition to those ordinances, there are a number of programmes and services, administered largely by the office of economic and workforce development. they're aimed at preventing commercial vacancies or assisting tenants and owners and filling commercial vacancies. the programmes are listed here and aoen they are speaking later. we can probably give you more details on all of those. but we have description of the programme in our report. we started with this analysis in trying to determine how many buildings and commercial
2:01 pm
storefronts are vai cants or abandoned. a number we thought would be relatively easy to get. but it was not in a number of reports and measures made by both city agencies and, of course, private sector real estate companies. but none of them capture the totality of all commercial buildings and storefronts and their vacancy rates. we can get certainly a lot of information about downtown commercial properties and their van can si rates and we can get commercial spaces throughout the city that are not receiving mail. the office of economic and workforce development does just commercial storefronts. but for 24 commercial corridors only. so, it is still not the city-wide rate. on this chart, you can see some of the rates that are reported and tracked. oewd reported 5% as a whole for the 24 quarters they track. 8.2% by the city controller for
2:02 pm
commercial vacancies downtown in 2016. and the u.s. postal service, as i mentioned, which reports all commercial addresses that are not receiving mail for 90 or more days had a rate of 7.4%. and there are about 45,000 commercial sites or addresss in san francisco. so, that gives you some perspective on that. in terms of the abandoned, vacant commercial property ordinances, the two i mentioned, so those are administered by the department of building inspection and by the ordinances they maintain registris to keep track of how many buildings have reported, that they're vacant and paid their fee. and you see on this chart the numbers from 2013 to 2016, the commercial storefront ordinance was not in place in the first two years, which is why that was blank. you can see for the last two years, and focusing just on the commercial, the commercial buildings were three in 2015
2:03 pm
and 28 in 2016. as for storefronts, 38 were on the registry in 2015 and 25 in 2016. comparing this to some of the other numbers that we obtained by commercial vacancy, we concluded that there is low compliance with the two ordinances. the numbers are low. certainly low relative to all commercial vacancis that are reported. but in addition, they have been geographically concentrated. so, for example, in 2016, 16 of the 28 -- excuse me, 25 commercial storefronts reported were on polk streets and haight streets alone in. 2015, 23 of the 33 were on street streets. so we know just from casual observation that there are properties on other streets that are vai cants or abandoned
2:04 pm
and this is not capturing the full inventory. there were none reported in 2016 in china town, castro t richmond district, the central mission or the financial district. and we did review a study done by hood line and they did a inventory in the castro district in march 2017 and found 53 vai cants commercial storefronts. these could include some that weren't required to register by the ordinance, but it is an indication of the volume of vacancies and commercial properties and some of which we assume are probably qualifying as vai cants or abandoned. this map is a representation of the commercial properties reported by the u.s. postal service for the fourth quarter of 2016. and we included it because it shows the distribution of vacancies and the rates. and you can see the darker the colour, the higher the rate of commercial vacancies.
2:05 pm
again, not all of these would be subject to the ordinance and required to register. but it does tell you that they are located in neighbourhoods throughout city and we assume wherever there are blocks of commercial properties, there is going to be some in the subset, which is what qualifies as vacants or abandoned by the ordinances. in addition to a low number of properties that are on the registry with the department of building inspection, because they pay fees, we collected information on the fees that have been paid in the last four years and that's presented in this chart. it has not been a very high amount, particularly for the commercial buildings or the commercial store front as you can see, under $5,000 for both of them in 2016. and the numbers that paid are also lower than the numbers that were on the registry. seven commercial buildings and
2:06 pm
five commercial storefronts. that can represent different things. one is the owner may not have been in communication with the department of building inspection because in many cases, the -- the vacant property is reported not by the owner, but by neighbours. neighbours will call in and inform d.b.i. that there is a space that's vacant. so, sometimes it gets on the registry without the owner's involvement. and in other cases they simply, you know, have not made the payment yet. in addition, another measure for the vai cants and abandoned commercial property programme is abatements and closures of cases and you can see here looking at the last four years also that it's a small number of cases that get abated and closed. and abated means that the -- that all the violations, because some of these properties have besides the problem of being vacant, they
2:07 pm
may have other building code or planning code violations that are being addressed at the same time. if the owner hasn't resolved that, the case isn't abated. and sometimes the scattered showers abated but the final payments haven't been made and the payments closed can. there is a low rate of compliance on these cases. or closure, i should say. excuse me. in terms of the limitations, and we worked with d.b.i. to address some of the causes of why the ordinances don't seem to be enforced to tex -- to the extent that they should be and in many cases, you know, as mentioned, we think the owners are not registering. the department does not have a proactive programme or approach to identify the buildings and contact the owners to ensure that they register their properties and pay their annual fees. so, as mentioned, the most
2:08 pm
common source of information about the properties is neighbours complaining rather than the owners self-reporting. which is the requirement in the ordinance. in addition to neighbours registering complaints, city employees will sometimes observe the abandoned or vacant property and report it. these can be d.b.i. employees or others who observe it when they are working in the field and report the information to d.b.i. another factor is d.b.i. does not monitor the vacancies after they are reported and added to the registries. so, there aren't updates in terms of the status of the properties once they have been added to the registry. the low fee collection has the added effect, of course, of not making resources available to expand or enhance the programmes. so, while we believe d.b.i. could extend some more proactive efforts to reach out to owners or identify other properties, that does take
2:09 pm
resources, but there is a source of resources, which is the fees. so, this sort of circular problem here in the programme needs to be enhanced and that will generate the fees which will enable the programme to be enhanced. and finally, the registris are not posted online. so there are limitations in terms of the property aware that they are registered and whether the property they are aware of is on the registry or not. d. by. has stated that the reason nar is they don't want to make the information available for security purposes because a vai cants, abandoned building can be attractive to people to get into it for illegal purposes. as supervisor yee mentioned, we're not alone in having a problem with commercial vacancies. we did review some other cities and what their vacancy rates are and this is not just dealing with abandoned and commercial, but commercial vacancies as a whole.
2:10 pm
new york, there was a report from last martha recorded a 5% to 20% vacancy rate in various retail corridors throughout city. what was interesting there is some of the higher rent districts are having higher vacancy rates and what they're finding is this problem with the retail industry right now in general which is there aren't enough high-end tenants that want to occupy brick and mortar space any longer. so, everyone is waiting for the big tenants, but they're cutting back. chicago had a rate ranging from 3 30i8 to 14.3% throughout the metro area. and it was 10% overall. they did cite rising costs, higher rents as being a hardship on a lot of the businesss who are subject to the same industry changes. previously mentioned. and then the 24s commercial corridors tracked by oewd here
2:11 pm
in san francisco just for comparison range from 1.3 to 16.9% with west portals, retail area being the lowest and visitation valley, lee land street, i believe it was, being the highsest at 16.9%. we also reviewed some of the approaches being used in other cities. in chicago, there's sort of a two-pronged approach. one is economic development and funding for particularly neighbourhoods that have had a hard time filling vacant, commercial spaces. it is called the neighbourhood opportunity fund. they collect money from downtown developers who, in exchange, get density bonuses and some of those funds are used to provide capital to businesses in hard-hit neighbourhoods. the retail thrives zones is another programme and that involves reduced property taxes for certain businesses that
2:12 pm
meet hardship criteria. and competitive grants to enable them to repair and improve their properties to enable them to be october pieed again. but on ten forcement side, chicago also has a more stringent registration and fee programme than we see here. there they require fees to be paid every since months on vai cants or abandoned property. here we're on a one-year cycle. and here the vacancies are higher if it's not reported by the property owner. if it comes in from a complaints from neighbours as we see happens here frequently with d.b.i., then the fee is higher for the building owner. and if they're cited for repeat building code violations, the fee is also higher in chicago. washington, d.c. has a similar approach where there is higher fees charged for propertis that are vacant or blighted. they tack a surtax on to the property tax which is not something that the san
2:13 pm
francisco can touch because of state law limitations. it is just pointing out that some cities are using an approach of disincentives for leaving properties vai cants or who are abandoned. and dallas, the city of dallas and state of michigan have both adopted acquisition programmes or land bank where is they acquire and hold properties through the foreclosure process and if they have been vacants or abandoned and take posession of them and turn them over for uses that fulfill their economic development objectives. finally, seattle. and i think supervisor yee, you mentioned that and that is an interesting carefuls and this is probably dealing with the broader issue of commercial vacancies, but like san francisco, they have had a lot of requirements in their planning and zoning codes to -- particularly for multistory residential buildings to have retail uses on the ground floor. and we have, of course, those requirements in san francisco as well.
2:14 pm
they are removing many of those requirements or making them more flexible so that other uses can go in, including housing on the ground floor, child care on the ground floor and other use. and i think it is an acknowledgment of the process of the fact that building owners can not fill all the available space in these residential towers. and i know just around city hall here, you see it in many of the new buildings being built, there is space reserved for retail on the ground floor and it is empty and has been sitting empty for months and months, if not longer. this issue has come up several times here in san francisco. the planning commission did consider, for example, a proposal to allow retail space in a building in union square to be converted to office. it was ultimately denied but the proposal was made and considered. there was a decision made by the planning commission and approved by the board of
2:15 pm
supervisors last july to expand the definition of neighbourhood commercial districts and make it easier to open child care without conditional use permits. and that includes using what has previously been ground floor retail space for that purpose. and the planning department, central soma plan and implementation strategy includes proposals to require smaller ground floor, retail spaces in central soma and that would allow for a mix of retail uses and types. right now there's certain size requirements that may be inappropriate now that there is -- that the retail market is changing sophomore and different types of businesses and different types of spaces are needed to fulfill the changing requirements of the industry. so we included a number of policy options in our report. here they are. the board of supervisors could
2:16 pm
enhance funding for existing small business programmes. again, the oewd programmes. we did, as i mentioned, look at owl of them. we couldn't put them all together to determine which ones in particular have resulted in occupying a previously vacant or commercial space. but we know that is the objective of a lot of their programmes. so we think combined with some additional performance metrics, that's something that the board could consider for additional funding if the programmes are proving effective. another is for the board to consider requesting the planning department and the planning commission to consider and report back on possible zoning and planning code changes. to allow for more flexible uses of commercial spaces. another is to suggest to d.b.i. that they apply t their outreach on commercial storefront ordinances so owners are more aware of the requirements and that they could also help reduce barriers for the public and city
2:17 pm
employees to report on vai cants and abandoned commercial properties. the ordinances could be -- the existing ordinance could be amended by the board of supervisors to raise fees and penalties. similar to what i was pointing out in both chicago and washington, d.c. where there are variable fees and if owners aren't registering or keeping their property vai cants for prolonged periods of time, higher fees could be attached. right now it is a flat fee for all properties, regard less of the kfnlts another is that the city require in combination with d.b.i. to access the information that's compiled by the u.s. postal service. i mentioned that they do compile that information, but it is a rich source of information that could finally give the city a city-wide database on commercial properties. that would be extremely useful in monitoring the situation and how it's changing over time.
2:18 pm
and finally, that the board could request a d.b.i. make the vacant building and commercial store front registries publicly available. that would help get the public more involved in reporting and monitoring vacant commercial properties in their neighbourhoods. so that is the summary of the report. christina is also here and we're available to answer any questions you might have. thank you. >> thank you very much for that overview. i know that our office work add lot on the registry issue. given that a law was passed but we also noticed that it wasn't really updated as well. and i think as we go on into our other presentations, one of my observations now is that even if we were to have this wonderfully filled database of all the vacancis that that still might not address the issues that we're dealing with in terms of the changing nature of retail. i really like the suggestions that were offered in this report. supervisor fewer? >> thank you very much.
2:19 pm
i just have one question. you mentioned that the city of chicago charges a vacancy property registration fee every since months if property is vai cants with higher fees charged if the property is reported by complaint rather than self-reported by the owner. >> cefjs >> i'm wondering has the city of chicago spaoefrntion add decline in vacant store fronts since it has implemented higher fees and propertis that were not self-reported to see if it's had any impact? >> we do not have information looking at it over time, supervisor. we saw -- we got a point in time and saw that, you know, they still have a problem also. but the interesting question would be to see if fewer are being reported by complaint and we could get that information, but yoift on hand. >> thank you very much. >> thank you. and seeing no other questions or comments, thank you to the budget analyst office. i will now turn this over to the economic office and workforce development and they
2:20 pm
have a presentation on neighbourhood retail and strategies for store front vacancies. >> good afternoon, chair tang. committee members kim, safai, yee and stefani. thank you for including oewd about these informational items. we recently completed a study and our strategies for addressing store front and other commercial vacancies in our neighbourhood. today i'll be co-presenting with my colleague amy cohen and with our retail study consultant sarah graham strategic economics. our joint presentation will start with an overview of national retail trends and key findings from our recently completed can study by strategic economics and this information will them city
2:21 pm
department, policymakers and the public understand the restrictions that we're working within. the retail centre reviews current research and best practice which is will help inform and guide our policies and programmes so we may better support our store front businesses and neighbourhood shopping districts informed by the notable shifts in the national retail sector and local economy. amy and i will also share afterwards oewd's goals, strategies and considerations in support of vibrant, neighbourhood commercial districts and how we work to prevent and manage store front vacancies. aaron starr from the planning department will provide an overview of its tools as well that relate to store fronts. we'll close with considerations and next steps. so, thank you very much. >> hi. good afternoon. as mentioned, i'm sarah graham. i'm with strategic economic for an urban economics consulting firm located in berkeley. and i'm going to be going over
2:22 pm
the findings from our forthcoming report of state of the retail sector, challenges and opportunities for san francisco's neighbourhood commercial districts. and you've no doubt seen the headlines of the current challenges that the retail second is to is facing and these concerns about how national retail trends can impact us here in san francisco were one of the motivating issues that -- that led to this study. so other motivating issues are about the specific challenges faced by local businesses and how businesses and n.c.d.s may need to adapt to remain competitive in the change retail environment. so to explore these issues, we have prepared a study that includes three issue briefs and a related executive summary. i think you may have the executive summary in front of you today. but the report is forthcoming later this month.
2:23 pm
the focus of the study, it looked at the types of uses that typically occupy grounds floor retail space in the corridors. in the n.c.d.s. so, we didn't focus in on everything else in those corridors and everything else that goes into commercial space, but rather focused on traditional retail, restaurants, night life and entertainment and personal services and fitness centres. so, the conclusion to the study that i'll be getting to in this presentation reflects the changes that are occurring and the uses that are going into those spaces and corridors now, under current conditions. so probably the big trend that has been making headlines is store closures. you've probably seen articles talking about all of the major retailers that are closing. but it turns out that the story is quite a bit more complicated than that.
2:24 pm
and that there are a lot of stores closing, especially in categories like apparel, electronics, office supply and. department stores. other types of stores are actually seeing continued growth and store openings. so, stores like discount retailers like dollar stores, discount clothing stores and warehouse stores have actually been adding stores and sales at restaurants. and bars also continue to grow. and the other big trend that has been making a lot of headlines is nationally online sales are driving retail growth. so and not only driving the growth, but expanding into new categories. it used to be that we thought of online sales as being, you know, amazon was a book seller. but we all know that that's expanded into a lot of different categories now ands
2:25 pm
that online retailers are taking on a growing portion of growth. so,s in 2016, what we call nonstore sales, and so thiss a big term basically to refer to anything bought online and some other things. but those nonstore sales accounted for 12% of total national retail sales. but more than 50% of recent growth in retail has been happening online. so it's a small segment to date, but it is taking up a lot of the growth. and it is a segment that's growing fastest. the influence of e-commerce is also playing out in employment where national retail employment has been flat but e-commerce employment is growing. along with this is changing technology that has been influencing how traditional retail is occurring.
2:26 pm
so, retailer, restaurant owners and service providers are sbeg rating their brick and mortar sales and locations with online sales strategies. you see this if you order food on a third party delivery app or if you use an online booking platform for restaurant reservations. and the final trend that i'm going to talk about today is the growing importance of offering an experience or what is sometimes referred to as experiencial retail. households in the u.s. are spending more and more on eating out, fitness, buy advertise and travel. so retailers have been looking for way toss appeal to this increased emphasis on experience by doing things like holding classes and events or serving food and drinks in a retail location. and on the slides here, we have a couple of examples of this in
2:27 pm
san francisco the retailers. on the left is a store called byrd and beckett with a music event. it is a record and bookstore. and on the right is san francycle with another event where people are encourage to come from the event, but these types of veterans draw in shoppers and hopefully also to purchase. well, so then i'm going to move on to the impact of these national trends on san francisco retail. and i'm going to start with the good news first. the good news is that san francisco san francisco has been somewhat insulated from the national trends in retail and this sufferst buffering is in part due to our many competitive advantages in san francisco. and these are -- and these advantages include the really strong economy, a local cull thursday that places high value on buying local and on dining out.
2:28 pm
and strong tourism trends. however, recently sales in the general consumer goods categories and some other categories have been leveling off and even declining in the most recent pers for which data is available. so we see that the retail sector in san francisco now appears to be slowing. other indication of this are we've heard from brokers that rent for commercial space in the n.c.d.s have plateaued after years of increased rents. they have now at least leveled off, if not declined in some places. and also fewer traditional retailers are seeking space in retail districts. to counter this, there has been an increase in interest from personal service assist, restaurants and medical services. or offices.
2:29 pm
but the brokers are reporting a decline in traditional retail seeking space. as was mentioned in the previous presentation, oewd surveys 24 corridors biannually. looking at vacancies. and those surveys also show an increase in vacancies in some corridors. and oewd staff is actually going to provide more detail on this in a following presentation. in addition to these pressures, these national trends and other pressures on local retail, there are other challenges for san francisco businesses. the challenges that we found in talking to retailers, to businesses here in san francisco and through the research include employee recruitment and retention and high labour costs. the high rents in many of the
2:30 pm
n.c.d.s, the loss of long-time customers as households move out of the neighbourhood or even out of the city all together. and also land use regulations and permitting requirements. you know, some of these -- oh. and public realm challenges as well. so those include challenges like real and perceived feelings around safety and cleanliness, long-term vacancies, the perception of vacancies, how they look on a corridor and other factors that may droiblt a sense of disinvestment. [please stand by] please stand by] and many.
2:31 pm
>> and many businesses are thriving by providing these strategies. some businesses don't want to change. they've -- they've been in
2:32 pm
their business for dlever, and they don't want to change or they may not be able to overcome fundamental challenges, like a lack of market demand for what they're selling or their services. and that brings us to assisting individual businesses is not enough. it's actually the strong -- the district, the importance of the district really influences the aspects of businesses. so we found that retail businesses function as part of -- as part of the neighborhood commercial districts. and they rely on each other and other businesses in the districts and food traffic in a way that cannot be accomplished by themselves, so customers may come to an ncd to shop or get
2:33 pm
groceries or get a haircut, and then they may stop and shop at other stores when they're there, so each individual business can provide some of the foot traffic that helps support other businesses. other drivers of retail demand include local employers, people on their break at work and cultural, educational and medical institutions, professional services, medical, and other offices. so i'm now going to move into the conclusions of our study. so based on the data and study, we've developed four main implications, and that will wrap me up. so we have these four. the number one conclusion is to thrive in a more challenging business environment. retailers need to embrace new technologies, and i've
2:34 pm
mentioned several of these technologies already today, and they include on-line sales, social media and app-based delivery services. this means that businesses may benefit from technical and financial support in expanding their on-line presentation, adjusting their inventories or adjusting to a changing customer base. in addition, the city's curb management policies may need to be revisited to maintain an enhanced customer access and effectively meeting changing transportation needs what i will enabling businesses to take advantage of emerging delivery technologies, and i believe there are some pilot projec projects taking a look at that: the second main conclusion is that retailer need to be flexible and creative to provide customers with a more
2:35 pm
interesting retail experiences. examples of this are offer classes and workshops, hosting events and serving food and bench beverages at stores, and these events draw shoppers into the stores. this conclusion means that land use policies may need to be modified to provide retailers more exibflexiblity so that th can expand their services, like providing drinks in a retail setting. the third conclusion is about the importance of the district. diver diver diverseifying can help expand their customer base. the right mix really depends on the ncd or the corridor or the specific district. the components of a healthy mix include an anchor that drives foot traffic to the district,
2:36 pm
and an anchor could be a full-service grocery store or another large retailer or it could be a cluster of smaller stores, related retail stores or restaurants; some sort of use that's a little cluster. other businesses in a healthy mix include restaurants, nightlife and entertainment that compliment retail sales and provide gathering spaces for potential customers and potential services and fitness centers that provide needed services and also help to draw foot traffic. professional services provide needed services in an office-like setting directly to the general public, but even uses like office and housing that may not serve the general public help generate foot traffic and the demand for retail and ncd's. so what all this means,
2:37 pm
diversifying the mixes in an ncd so that retailers can support their customer base, is it should include a range of storefront sizes, and storefronts should be designed to adaptablity, and be able to serve a wide set of uses. it also means that the office uses that that are not open to the general public could be located off the ground floor or on the periphery of an ncd. limiting ground floor retail requirements for new development to the strongest locations for retail could also help reduce potential vacancies. so we talks a lot -- we've heard a lot today about vacancies and the work that we did suggests that limiting ground floor retail
2:38 pm
requirements could help to reduce those vacancies in the future. the final conclusion for our study is around experiencetial retail and the people visiting our entities. by offering a fun dining and shopping experience, ncd's can help to draw foot traffic. that means continuing to maintain and enhance the public realm is criticizing, so prioritizing pedestrian comfort and safety, keeping spaces adaptable and attractive can help to draw customers to an area and keep them there to make purchases. also, as we have seen in ncd's in san francisco, celebrating
2:39 pm
local, historical and cultural assets can contribute to a unique and interesting environment, so programming festivals and events can draw people into the ncd's, as well. and finally, high capacity district organizations can help districts to create a great experience for residents and visitors. so these type of organizations include community benefit districts, merchants' association, community development organizations and other types of management organizations. and i believe with that, i'm going to pass it back to martin. >> so perthe request, we wanted to go over some investing neighborhoods and go over some of the ncds that support our districts and small businesses. but first, we wanted to have a common definition of vacancy. but first, i want to recognize that we're all talking about
2:40 pm
the commercial districts supporting them, their vibrancy, their vitality, and what they have to offer all of us, whether we're businesses, residents or workers. and one thing that we all accept as part of a healthy district is vacancies. it's defined as an empty storefront or it's occupied with a noncommercial use. as is mentioned beginning in 2013, our staff conducted biannual physical storefront vacancy surveys. we're out there pounding the pavement as part of our program, and we want to also say that while we recognize that these underutilized spaces which may not be open on a regular daily basis, those are not counted at vacant. those are occupied from our
2:41 pm
point of view, but while they're not tech knee vacant, they certainly do have an impact on community perception in a neighborhood. what is a healthy vacancy from our perspective. economic developers usually use from a five to 10% range. that said, the perception of whether or not there is a vacancy problem in a particular neighborhood commercial district can vary. the numbers have value, as does each district's population based on their priorities and circumstances. sometimes even when the vacancy rate is within a healthy range, neighborhood stakeholders are concerned about vacancy. what you see here is that the citywide vacancy rate has stayed low, even through the recession beginning in 20 -- or coming out of it in 2009. as the bay area economy grew
2:42 pm
out of the recession, increase for retail space created competition, and we can also see rents growing quite quickly in retail spaces. the retail rent vacancy last year was -- was 3.2%, and this provides some concern when vacancies in a neighborhood get too high, as well they are too low. when vacancies are under 5%, we worry about those rent rising, and a needed change that we li -- a space for needed changeover time that we see in a corridor. we define vacancies in two different ways, either as active or inactive. active means we have an identified or commercial
2:43 pm
tenant. inactive is we do not have a tenant. we have historically divided these vacancies into these categories so we can refer businesses to storefronts that are technically available even if not proactively being leased. we report these annually to the controller's office, and for the purposes of the retail setting and as a way to gauge corridor health, we analyze a combined effect of both these active and inactive vacancies. they both have a value to us in terms of what residents are seeing and experience and also how we work in a given space. it's interesting to note when we began tracking in 2013 to 2016, that active vacancy rate, where we see our programs really having -- when packaged and tailored and curated in a way, we can see them having an impact here in terms of the active vacancy rate declining
2:44 pm
by about 1.7%, whereas citywide, you see those vacancies actually increasing by.9%. when we start looking a little closer at the five highest neighborhood have a cab see rates within our invested neighborhoods portfolio or the five lowest, we can see that some are greater than the healthy or normal range, and also some are very comfortable. but the average, generally, is within that healthy range. and i'm going to ask amy cohen to come up right now to talk about some of those factors that contribute to the vacancies. >> good afternoon. the bla report started to identify some of the causes of the vacancies in san francisco and we just wanted to try to describe it in a very colorful
2:45 pm
picture quickly. and in our experience, this office has done a lot of work filling vacancies and doing more comprehensive commercial corridor work. in particular in low income neighborhoods, but also in moderate and higher income neighborhoods around the city. and we wanted to just share our experience, which is at the very core of this picture that i'm calling an on dion is a building owner, and the building may have investors. anything you do to try to fill a building comes down to the owner and motivation. if they are not motivated or willing to lease the space, it's very challenging. a couple of other factors as you work out from there are brokers, who may or may not work for the owner, or round rents. if they think they could get a higher rent they could hold out
2:46 pm
if the owner is sort of aware of what the considerations are. the next layer out is really the building conditions, and i don't have to say much about that, but that can be an insurmountable challenge. they might not have the capital, or sometimes they do, but then encounter something else as they've already gotten into the process and then they can't afford to move forward. the neighborhood conditions have been talked about a lot today. these influence some retail more than others. many businesses want to gravitate toward where other businesses like them are successful or where there's a lot of spending power or high income or density to be the spending power. and many of the businesses that are only reliant or very much reliant on foot traffic are very sensitive to challenges in safety and cleanliness or other challenges like parking. the city regulations and
2:47 pm
processes hit both the neighborhood side and the business side. again, i don't think these are new issues, but at the building level, there's a lot of regulations to navigate, and at the neighborhood level, there may be use restrictions, some of which are intended to prevent certain types of businesses from coming in, but others which maybe aren't, but are hard for landlords and brokers to understand. and then, a prospective tenant's ability to navigate all of this is another challenge, and some of them have a lot more capacity than others, and some are only going to have the motivation if there's a very high demand and very big payoff for them to go and open. and this is why we see formula retail sometimes being able to navigate processes because they have the corporate hitie-in an support.
2:48 pm
and then finally outside of this is all the trends in retail generally, which we've been talking about today. i just want to let you know that we have experiences trying to deal with all of these different layers, but it takes a lot of time and understanding to know where the hurdles are, and a lot of relationship building and a lot of infrastructure with community partners, brokers, and everyone else. so i think that with that, i'm going to turn it back. >> i just heard that the definition i provided might have been captured incorrectly on the closed captions, so active vacancies are defined as those which do not have an existing or identified commercial tenant, do not. in terms of the programs that we provide to support both our corridors and small businesses and of course invested neighborhoods, is there to focus on small businesses but also the targeted neighborhood commercial district. our programs are designed and deployed based on significant conversations with community around their priorities and
2:49 pm
desires. both are internal and external capacity. the resources that we have available to support both business services and neighborhood improvement projects, all of those are aimed at realizing an economically thriving safe, resilient, sustainable district that meets the needs of our local residents. some of our services are available citywide where others are more tailored to a specific neighborhood's needs when we are looking to concentrate and prioritize our efforts. at the time right now we have gun looking through an equity need, where we can inour time and/or resources. in those targeted commercial districts, we partner with community, board of supervisors members and other agencies, and through that we have opportunities to develop, package, deploy services to address the particular needs of
2:50 pm
that district. the ability of us to track these vacancies and the data that we shared is a direct result of our vested neighborhoods program. as we track vacancies and make neighborhood resources available, we have employed various tools to prevent and both fill vacancies. here, you'll see when we think about the space as a whole, the commercial district planning and management that we do in support of economic development plans, the powerful work that our community benefit districts provide, in terms of both a heightened level of services and also a sustainable committed level of resources based on the work that they do, the importance of our merchant associations and our nonprofits who work towards capacity building to make sure the community members are well supported and informed in what
2:51 pm
the city can -- can do in partnership with them in service of their neighborhoods. cultural district planning. based on what we've seen very positively achieved in japantown. in addition to that the japantown cultural heritage. and reminding folks that experiences in their neighborhoods can be a very powerful tool both to celebrate the identity of a given place but also to remind the people of the specialness of any given district. and finally, public realm enhancemente enhancements and events that are important to the community. we want to make sure, as well, when you deal with individual
2:52 pm
businesses that are -- our small businesses can stay open, that they can expand in the city and be successful. and as we develop our programs, we attempt to develop them with the various stages of any individual business in mind. meaning that we want flexible programs that can support businesses that's starting up and/or is opening multiple locations in the city or is thinking about other plans that they want to make. in this slide, their things that can help businesses strengthening retentions and applications, whether it's around the ada program, when it's around construction program that we've come to this body before, to alleviate them in the best way to deal with those issues. or in the case of most recently, a westportal fire or fires in the mission, a support
2:53 pm
program to help those businesses. in addition given the rising real estate prices and economic pressures that so many of us have been encountering throughout the city, we want to make sure that we're being particular about how we look at retaining and relocating when necessary businesses that are of -- important to us both from an individual perspective but also for the overall health of the local economy. our access to capital programs also support that in terms of providing low-interest loans to communities in a culturally component way, as well as investing in those areas where we want to see investment increasing, whether we talk about the bayview, the tenderloin and other neighborhoods. also to support that, our sf shines and tenant facade and improvement programs, which can go a long way in being a useful incentive in partnering small business and property owners for the benefit of our communities. some of those same tools can
2:54 pm
actually be used to attract businesses, and at oewd we also have an array of initiatives that also support these efforts, when we have target sector attraction services, when we talk about trying to atrack grocery stores or particular restaurants or nightlife to a neighborhood, arts, nonprofits, a production distribution repair businesses, catalyst properties that we can focus on, that have significance to a community, those can go a long way in terms of drawing someone who may not have been inclined to consider a certain neighborhood when packaged with a facade improvement program, and also the insurance that the bureaucracy can support them through that process. and as we've done since 2016 with our small business acceleration program serving over 160 businesses, we've certainly seen some success there. we certainly have a long way to go, but it's a great start in supporting those businesses. now to talk about the planning department, i want to invite up
2:55 pm
aaron starr from the planning department. >> good afternoon, supervisors, aaron starr, manager of legislative affairs for the planning department. i want to go over the tools that we have to help the planning corridors, and help shape more inviting commercial spaces and corridors. so the first tool is the individually named neighbor commercial districts. there are two typed of nc districts in the see. there's general neighbor commercial districts like nc-1, 2, and 3, they're individually named like noriega, and folsom. unlike individual named nc
2:56 pm
districts, region district presents its own challenges, and there's not one set of solutions for every district. next, vertical zoning controls are utilized more in the city's nc districts although they are used to a lesser extent in districts like the downtown shopping district and our residential commercial districts. this type of zoning control can be used to encourage more active commercial uses on the ground floor and less active uses on the second and nird floors, depending on how they're crafted. next we have our formula retail controls which primarily serve to preserve the aesthetic characters. certain districts have taken these controls further by prohibiting formula retail outright or prohibiting certain types of formula retail like formula retail restaurants. the approval process can also be used to encourage or
2:57 pm
discourage certain types of uses, principlely permitting a use allows them to establish without permit approval, without mandatory discretionary review provide needed review and commissioner approval. and it can require that notice go out to neighbors within 150 from the change of use, and that's for 30 days. it's important to keep in mind, though, that conditional use approval and mandatory discretion year review are really only effective in ensuring that a proposed use is effective as a particular location. an approval with use is carried with the land. the focus is often on the operator of the establishment with you once the use is
2:58 pm
established the owner may change without commissioner review. we also have design guidelines, nonresidential use size limits, active commercial use requirements, and a ground floor 5 foot height bonus. these code requirements seek to ensure that storefronts remain attractive and fit within the control of a neighborhood. i'd also like to clarify that -- about the active commercial use requirement. while require active uses on the ground floor in our 234 c districts, only certain streets or segmented streets require active commercial uses, and these don't necessarily have to be retail. another tool we have to preserve commercial corridor character and other unique storefronts in san francisco is our historic preservation review, typically done as part
2:59 pm
of our coke with a review, it ensur ceqa review, it ensures to bring storefronts you want to modern. -- or appropriate incidental and subordinate to any such use. currently accessory uses are limited to one-third of the floor area unless it's a catering use where the product is sold on-site. in that instance, there's no floor area limitation. this is one avenue that could be explored to allow businesses more flexiblity to operate. however currently we do allow multiple uses in one storefront even if they don't meet the definition of an accessory use as long as they are permitted as an individual use on my site, and that concludes my segment. thank you. >> i'm just going to close real quick.
3:00 pm
so we tried to package all of the potential implications of what you've heard today, both the trends in national retail, the local challenges, and some of the concerns that have come up about either programs or neighborhoods. and so we just wanted to kind of summarize these and then we'll tell you about next steps and open it up for q&a. we think that there should be some shifts in how we support neighborhood commercial districts as a city, and we have come with planning prepared to look at our programs and prepared to look at our tools, so the first category we think should be looked at is small business technical assistance. and to really look at how do we support businesses in tooling up to be able to use technology for everything they do. that's in particular something we could look at. in our neighborhood commercial district programs, we feel that there might be a way to amplify some of the actuals that we alreadyve


info Stream Only

Uploaded by TV Archive on